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Amazon Eyeing Ad-Supported SVOD Service Separate From Prime Video

21 Nov, 2014 By: Erik Gruenwedel

Amazon reportedly will launch a standalone subscription streaming service next year that will be funded in part by embedded advertising – and be separate from Prime Instant Video.

The unnamed service would likely involve the e-commerce behemoth’s Kindle tablets but be separate from Amazon Prime Instant Video, which is ad-free but costs $99 a year — and also offers free two-day shipping on myriad purchases.

Analysts contend Amazon Prime has 50 million members worldwide — the majority of whom don’t watch video. Netflix does not embed advertising in its video streams.

Amazon is eyeing the ad-supported service as a conduit to Prime or budget-conscious consumers, according to the New York Post, which cited a source familiar with the situation. The Wall Street Journal in March first reported Amazon was working on the service.

Wedbush Securities' Michael Pachter, a longtime bear on Netflix, said such a service could be a “Netflix killer.”

“Who wouldn’t switch if you were poor or you’re a cord-cutter?” Pachter told the Post.

2015 is prepping to be a breakout year for SVOD and over-the-top video with several major media companies bowing services. Most eyes will be on HBO and Showtime — the two premium content channels most-coveted (along with ESPN) by traditional multichannel video program distributors such as cable, satellite and telecom — to see what and how their respective services offer and don’t offer.

For example, when HBO took the big step of licensing for the first time content to a third-party SVOD service (Amazon Prime), it was sure not to include current programing.

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